Obama won't take public funds

June 19, 2008 1:27:30 PM PDT

By JIM KUHNHENN Associated Press Writer

WASHINGTON (AP) - June 19, 2008 --

Democratic presidential candidate Barack Obama said Thursday he'll bypass the federal public financing system in the general election, abandoning an earlier commitment to take the money if his Republican rival did as well. Obama, who set records raising money in the primary election, will forgo more than $84 million that would have been available to him in the general election. He would be the first candidate to do so since Congress passed 1970s post-Watergate campaign finance laws. Sen. John McCain, the Republican nominee in waiting, said Thursday he will accept the public funds in the general election.

Obama officials said they decided to take that route because McCain is already spending privately raised funds toward the general election campaign. Obama has vastly outraised McCain, however, and would likely retain that advantage over McCain, who told reporters in Minnesota, "We will take public financing."

"It's not an easy decision, and especially because I support a robust system of public financing of elections," Obama told supporters in a video message Thursday. "But the public financing of presidential elections as it exists today is broken, and we face opponents who've become masters at gaming this broken system."

Shortly after revealing the decision, Obama's campaign announced his first television ad of the general election campaign - a 60-second commercial to air in 18 states. The ad, called "Country I Love," is a biographical portrait that aims to reintroduce Obama to voters by stressing his mother's family's roots.

Obama has shattered presidential campaign fundraising records, raking in more than $265 million as of the end of April. Of that, nearly $10 million was for the general election. McCain, on the other hand had raised nearly $115 million by the end of May, But Obama's clear financial advantage over McCain is offset in part by the resources of the Republican National Committee, which has far more money in the bank than the Democratic National Committee. Both national parties can spend money on behalf of the presidential candidates.

In Iowa, McCain criticized his rival for backtracking, reminding reporters that Obama "said he would stick to his word. He didn't." The Republican candidate added, "This election is about a lot of things. It's also about trust. It's about keeping your word."

Obama said McCain and the Republican National Committee are fueled by contributions from Washington lobbyists and political action committees.

"And we've already seen that he's not going to stop the smears and attacks from his allies running so-called 527 groups, who will spend millions and millions of dollars in unlimited donations," Obama said.

Obama campaign lawyer Robert Bauer said he had met with McCain lawyers to discuss terms for both campaigns operating in the public financing system, but he said they could not agree on how to limit spending by the campaigns and outside groups heading into the late summer party conventions.

He said McCain has had an advantage because he has been running unopposed since he secured the Republican nomination early this year. "The important thing is that John McCain has been running a privately financed campaign for the general election since February," Bauer said. "The problem from our perspective is that the horse is long gone from the barn here."

Despite Obama's claim that outside groups allied with McCain will spend millions of dollars against him, few Republican-leaning groups have weighed into the presidential contest so far. In fact, Obama allies such as MoveOn.org are the ones have been spending money on advertising against McCain.

McCain and Obama both declined public financing in the primary contests, thus avoiding the spending limits that come attached to the money. McCain had initially applied for the money, however, and has been in a dispute with the Federal Election Commission over whether he needs commission approval to decline the primary election funds. The FEC insists that he does, but has not had a quorum to act because four of its six seats have been vacant pending Senate confirmation of presidential nominees. McCain lawyers have disputed the need for FEC approval.

Fred Wertheimer, president of the campaign finance watchdog group Democracy 21, said he was "disappointed" in Obama's decision. "We do not agree with Senator Obama's rationale for opting out of the system," he said. "Senator Obama knew the circumstances surrounding the presidential general election when he made his public pledge to use the system."

The public finance system is paid for with the $3 contributions that taxpayers can make to the presidential fund in their tax returns.

Last year, both Obama and McCain indicated in separate commitments that they would participate in the public system for the general election, as long as both candidates agreed.

In response to a questionnaire in November from the Midwest Democracy Network, which is made up of nonpartisan government oversight groups, Obama said: "Senator John McCain has already pledged to accept this fundraising pledge. If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election."

While presidential candidates have rejected public financing in primaries, no major party candidate has bypassed the system in the general election.

McCain has already aired two general election ads in at least 11 states, spending about $2 million a week over the past three weeks.

Obama's new ad is his first and expands the field of potential battleground states to include states that have reliably voted for Republican presidential candidates in the past several elections, including Alaska, Colorado, Georgia, North Carolina, Virginia, Indiana, Montana, and North Dakota.

"I was raised by a single mom and my grandparents," Obama says in the ad. "We didn't have much money, but they taught me values straight from the Kansas heartland where they grew up. I'll never forget those values, and if I have the honor of taking the oath of office as President, it will be with a deep and abiding faith in the country I love."